AppNexus, Google and Facebook's biggest rival in ad tech, is talking to Goldman Sachs as it considers an IPO

AppNexus CEO Brian O'Kelley. Robert Libetti/ Business Insider The world's largest independent ad tech company AppNexus has been meeting with investment banks to discuss IPO plans, people close the company told Business Insider.

One of the banks AppNexus has met is Goldman Sachs, those people told Business Insider, although the company has yet to officially appoint any of the investment banks it has been meeting with.

An AppNexus spokesman told Business Insider: "We have not retained Goldman or any other investment bank."

AppNexus has long been a potential IPO target. The company was founded in 2007 and has raised $288 million in funding. It employs more than 900 people across 23 offices and operates an online ad platform that handles around $2 billion in ad spend, which gives it the biggest ad reach on the open internet after Google (AppNexus also has access to Google inventory and all the other major open sources of display advertising such as the Facebook Exchange and Rubicon Project.) AppNexus also recently launched a suite for publishers, giving it a "full-stack solution" for both the buyers and sellers of online advertising.

AppNexus said it closed 2014 with a net revenue run rate "in excess of $250 million on an annualized basis" and "record profitability." The company has previously been valued at $1.2 billion.

Could AppNexus be looking for a buyer instead?

Another option for AppNexus is to search for a buyer. However, ad tech executives told Business Insider AppNexus would be seeking a price of between $2 billion and $3 billion, leaving few companies the ability to afford the ad tech firm.

Firstly, the cycle of independent ad tech companies is playing out. You had all these companies funded in 2007/08, and some of them emerged as strong companies, but lots are not working very well. The latter can't survive independently, and so I've got the feeling that a lot of those companies will have to find ways to survive or they'll go out of business.

Secondly, the internet's major players are continuing to believe that ad tech is one of the continuing new drivers for growth, and since we saw Verizon jump into the game in 2015 [with the $4.4bn purchase of AOL], we'll see many other large players will come into the game. And that's not just telcos, that's enterprise [software] companies, or it could be the other Silicon Valley majors.

This is the environment AppNexus, as an independent, is currently up against. So it makes sense that its executives are seeking options to take the company to its next stage.

Sir Martin Sorrell, CEO of WPP. Reuters/Ruben Sprich

If a buyer does come forward for AppNexus, it'll probably be considered as a jewel in the crown for its new owner. AppNexus is a highly-respected partner among the advertising agency world. So much so that WPP, the world's largest advertising agency holding group, invested $25 million in the business last year.

But Jonathan Beeston, UK managing director of digital performance agency Croud, says while AppNexus' next move will be "interesting to watch," he might be doing so from "behind the sofa."

He told us: "Google and Facebook are crushing everything around them. Although both say they're not building walled gardens, it's hard to imagine them becoming truly open stacks either. AppNexus provides an alternative, but without the unique data assets and inventory access that the Big Two have. AppNexus is stuck between a rock and a hard place."

Beeston said its deal with WPP might have made its relationships difficult with competing global ad agency networks (AppNexus denies this,). The likes of IBM and Oracle "haven't shown much appetite to get really involved in media buying," he said, so failing a wild card, Verizon-like buyer, an IPO may be the only choice.